They generate 5 percent of Germany's electricity -- more than in any other country in the world. But with the best plots already taken, there are now few spaces left where companies are allowed to build more. And it's not just a German problem.

"There's not that much empty land space," said Steve Sawyer, secretary-general of the Global Wind Energy Council, which represents the industry. "Northern Europe is this little, crowded peninsula on the western tip of Asia with an awful lot of people.

"The next big phase of development in places like Germany and Holland will be offshore, where the resources are so much better."

With a target of generating around 30 percent of its electricity using renewable energy sources by 2020, Germany is one of several countries where investment is being poured into offshore wind technology. The first large sites are planned for next year in the North and Baltic seas.

In countries keen to reduce emissions and dependency on fossil fuels, offshore is the place to invest, analysts say.

Thanks to offshore investment, Germany's environment ministry predicts wind power could generate around a third of electricity by 2030, more than currently generated using gas.

"At the moment I would buy German offshore wind projects," said associate William Young at consultant New Energy Finance. "There's a sea-change going on in offshore at the moment which could allow some good money to be made for people who are willing to take calculated risks."

It is not just a question of space. Offshore turbines can also work harder, generating at full capacity up to 50 percent of the time. Sheltered onshore turbines work at full tilt around 20 percent of the time.

LAND GRAB

In Britain, where around 1.5 percent of electricity is produced by wind, opposition to 50 meter-tall turbines near homes has meant companies are also looking out to sea.

"In places like the UK there was never really enough land anyway and the government was crazy thinking anyone would want to have a wind turbine next to their house."

Also, as the European Union makes emitting carbon more costly, utilities once wary of investing in renewables are taking note. Under EU rules, companies have to buy extra emissions permits if they produce too much harmful carbon dioxide, making polluting more expensive.

Germany's biggest power producer, RWE, said last month it plans to quadruple its generating capacity from renewables, investing 1 billion euros annually from 2008, mainly in onshore and offshore wind.

In countries which have space on land, investment is also wise, Bunce says: the United States alone could supply most of the world's wind power growth in the next five years.

Recent research supports the theoretical potential of wind power.

Stanford University researchers have found that if only 20 percent of the world's wind power could be captured, it would satisfy 100 percent of energy demands for all purposes and over seven times its electricity needs.

NO SILVER BULLET

But offshore wind is not without drawbacks, and over the longer term, it could be upstaged by other sources.

"It costs a lot more and it's a lot more difficult. The development of offshore technology is in the same place that onshore wind industry was eight, 10 years ago," said Sawyer at the Global Wind Energy Council.

Offshore turbines have to be installed and maintained in much harsher conditions, and while they can be bigger and more powerful, they need to be extra reliable.

"It's almost like designing a ship. You can't afford to have a 5 million euro machine standing offshore, and some 25-cent part breaks and have it sitting idle for a month," Sawyer said.

Germany is seeking to "repower" its onshore sites with new, more powerful turbines and with offshore being riskier, it is wise to invest in other technologies too, analysts say.

"Offshore will only be truly widely accepted when the benefits are really seen, when the first big projects take off," said Johannes Lackmann, head of Germany's renewable energy association. "We have to develop all renewable energy resources. Some will prove fit, some will not and fall to the wayside."

So the industry has a tricky choice: invest now or wait until technologies improve, hoping there is a better answer.

"There's no silver bullet. There's going to be far greater energy efficiency: it's going to be offshore wind, onshore wind and a little of solar, plus cleaner coal, plus nuclear and gas," said Young at New Energy Finance.

"Renewables are not the answer, they are just a small part of the answer."

While wind is cost-competitive over the next decade, advances in solar and wave technology will eventually make these sources equally, if not more attractive, analysts say.

"Longer term, solar makes a lot of sense because you put it anywhere. Further down the line, it's wave power," Bunce said.

But while turbines can be installed off the coast, floating wind farms are unlikely to be a viable option.

With some in the shipping industry concerned about how wind farms could block radio frequencies and shipping lanes, the amount of suitable sites near the coast is limited.